Hershey’s (HSY): Breaking records during a recession? [Video]
|The Hershey Company (HSY) is a multinational manufacturer of chocolate and non-chocolate confectionery, pantry items, gum, mint refreshment, snack bites and mixes, and spreads. It has three reportable segments, including North America Confectionery, North America Salty Snacks, and International, which operate and manufacture products across several countries. Hershey’s is headquartered in Hershey, Pennsylvania, and is one of the largest chocolate manufacturers in the world. HSY is listed on NYSE and is a component of S&P 500 under Consumer Staples.
HSY bucked the trend compared with S&P and was in a bullish uptrend since Dec 2021. The Wyckoff sign of strength (SOS) rally continued throughout the first quarter of 2022 until it hit $227.50 on 21 Apr. The price then retraced with a slight localized increase in volume. A large single bar down on 18 May marked a Wyckoff change of character (CHoC). This stopped the up swing and into a trading range for several months. However, the lack of significant volume suggests lack of supply to push the price down further.
The price found support around $198 and made several attempts to break the resistance of $227.50 in the subsequent months. These price actions are characteristic of a Wyckoff accumulation phase. Around late October, the price broke above that axis line and hit a new high at $239 on 31 Oct. Nevertheless, the subsequent reaction was an impulsive wave down back into the trading range. The increase of volatility and volume in the down wave suggested more testing ahead.
The price made another attempt around 8 Dec to break the $239 resistance but was unsuccessful. However, the volume of the reaction this time was less than the previous reaction in early November suggesting decreasing selling pressure. It formed a higher low at $212 on 20 Jan 2023 and started a SOS rally up. HSY price had since tried to break the resistance and each reaction was shallow pull back with higher lows.
Hershey’s (HSY): Bullish or bearish?
Bullish. According to the Wyckoff method, HSY is now consolidating at the higher end of a trading range with the shallowest reaction. The price is likely to rally and start a mark up phase to create an all time high if it commits above $239.
If the price breaks below $233, it will likely retest the immediate support at $225 followed by $212.
HSY was discussed in detail in my weekly live group coaching on 21 Feb 2023 before the market opened. The exhaustion of the selling momentum last week as discussed in the video below could suggest resume of the up swing.
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